Big development bonus to float around Hudson Square?

BY SAM SPOKONY | Last month, the first proposal for affordable housing within the new Hudson Square Special District was publicly unveiled, when major developer Extell brought its plans for 68 Charlton St. to Community Board 2. The developer has applied for an “inclusionary housing” bonus — offered within Hudson Square as part of the area’s rezoning last year — which will allow them to build higher than zoning regulations typically allow as of right, in exchange for including those affordable units (in Extell’s case, 25 of them) along with luxury units.

Now, it looks like another big developer, Related Companies, is also taking advantage of the same kind of bonus — but they’re proposing to do it through a site that lies just outside the Hudson Square Special District. The site is 261 Hudson St., between Canal and Spring Sts., where Related demolished a long, one-story building last year to make way for a future 12-story residential building.

Although construction has not begun, the new building is currently planned to include a total of 201 apartments — 160 market rate and 41 affordable — according to a spokesperson for the developer. Along with getting a 421a tax break — since the building would be 20 percent affordable — Related has also submitted an inclusionary housing application to the city in order to get a big floor-area bonus, according to a spokesperson for the Department of Housing and Preservation and Development, the city agency that handles the inclusionary program.

An interesting point, however, is that the site actually lies outside the rezoned Hudson Square district. In fact, because it’s just across the street from the rezoning district’s western boundary line — in a separate zoning district that doesn’t allow inclusionary housing — that bonus can’t be used at 261 Hudson St. Instead, Related would be able to transfer or sell the bonus to a nearby site, most likely within Hudson Square. That bonus would be equivalent to the total square footage of the 41 affordable units at 261 Hudson St., and while it wasn’t immediately clear yet exactly how big those units will be, it will be tens of thousands of square feet that could eventually be tacked onto some mega-luxury development nearby, or perhaps split up among multiple sites.

Related presented its plans for 261 Hudson St. to C.B. 2’s Land Use Committee on March 12, but no vote was taken because, as Committee Chairperson Tobi Bergman told The Villager, there were some “unresolved discussions” that will have to be continued at the committee’s meeting next month. Since then, the developer has not responded to this newspaper’s questions about their plans for using the bonus, if the application is approved by the city. In any case, that possibility of a sizable floor-area bonus to be transferred or sold within Hudson Square is certainly something worth keeping an eye on, especially as the new district is expected to continue to draw attention from big developers in the coming years.

“Related are the masters of working the system,” said Andrew Berman, executive director of the Greenwich Village Society for Historic Preservation, when this paper mentioned the issue to him. “They definitely know how to work the system to get the maximum advantage.”

Meanwhile, Related made a big purchase last week just south of Hudson Square, in Tribeca. The developer bought six parcels — 264-270 West St. and 33-35 Desbrosses St. — from their longtime owner, Ponte Equities, for a total of $115.3 million, according to city records. Real estate publications have reported that those buildings, which lie just a few blocks below Canal St., have at least 171,000 square feet of development rights, although “insiders” cited in one report said the true air rights could be greater than that. Related has not yet filed any new demolition or construction plans with the city for those lots, but new development there could be coming soon.

And in yet more related Related news, the developer made a major announcement on March 19 about its ongoing Hudson Yards development between W. 30th and W. 33rd Sts., west of 10th Ave. Construction has now begun on the 10-acre platform that will cover the rail yards on the eastern portion of the 28-acre site, allowing for new work to start (and ongoing work to continue) on more than 7 million square feet of development — including two commercial towers, more than 100 shops and restaurants, luxury and affordable housing, a hotel and six acres of open space.

Related said it expects the entire Eastern Rail Yards portion of Hudson Yards to be completed by 2018, with its first commercial building, 10 Hudson Yards, on track for completion next year.

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